Sunday 8 September 2013 13.59 EDT
First published on Sunday 8 September 2013 13.59 EDT

Greece's prime minister Antonis Samaras has insisted the worst is almost over for his country and reassured Greeks that the debt-stricken nation's longest recession would soon be consigned to the dustbin of history.

Boosted by figures showing the economy contracting by 3.8% in the second quarter – its smallest decline since the outbreak of Athens's worst financial crisis in modern times – the leader said the country's dependency on foreign lenders was also nearing an end.

"Greece is turning a page … all the international organisations agree that next year, 2014, will be the year of recovery for the Greek economy," he told industry and business leaders attending the annual Thessaloniki trade fair. "Last year most abroad were predicting that Greece would exit the euro. Now they are predicting the exact opposite. That Greece will exit the recession and stay in the euro," he said promising that the progress would hail the end of unpopular austerity.

The fair is traditionally used by Greek prime ministers to outline their economic policies. Using the keynote speech to list the achievements of his 14-month government, Samaras said Athens had not only made the biggest fiscal adjustment "in world history", but emerged with an economy that in regaining its competitiveness was on track to return to pre-crisis levels. Much of the rebound is due to an unexpectedly good tourism season.

If Greece kept up the progress – the condition of rescue funds worth €240bn from its "troika" of creditors at the EU, ECB and IMF – Samaras said the country would also succeed in shaving its debt mountain, at €320bn the biggest in the eurozone.

"After the end of the year, we will achieve a new lightening of the debt burden," he insisted reminding international lenders they had "committed to" making Greece's debt load sustainable if Athens posted a primary surplus [before interest payments on debt] by the end of 2013.

"A primary surplus will mean that the country can stand on its feet [and] will be the first decisive step towards exiting the policies of the memorandums," he said referring to the two loan agreements Athens has signed up to since the start of the crisis. By returning to capital markets and breaking free of creditors, Athens could use the surplus to "lighten the injustices" of Greeks on low pensions and public sector employees hit by cuts.

With German elections looming, Greece is under immense pressure to continue paring back the bloated public sector – the root of the country's financial woes.

But the government also faces the herculean task of keeping the social peace at a time when most Greeks, struggling with draconian cuts and tax increases, are bracing for their hardest winter yet. Driving home a message of hope is central to the campaign.

In Thessaloniki over the weekend it was quite clear that many disagreed with that message just as they do in Athens and other parts of the nation. Police estimated that around 50,000 took to the streets to decry the record levels of unemployment and poverty associated exclusively with almost four years of austerity driven recession.

The radical left main opposition leader, Alexis Tsipras, accused Samaras of lambasting Greeks with "a primary surplus of deceit."

There is mounting speculation that Greece, whose economy had shrunk by nearly 25% since 2010, is heading for a third bailout in what EU mandarins hope will finally be the end of the eurozone crisis. The IMF has indicated that the country will face a €11bn funding gap when the country's current rescue program ends next July.

On Sunday, the German finance minister Wolfgang Schäuble repeated that Berlin was "always ready" to help as long as Athens fulfilled its side of the deal. But Germany, which has provided the bulk of Greece's bailouts to date, rejected the notion that Athens would receive any kind of debt relief – a move that would cost German tax payers up to €30bn .

Greece was forgiven €145bn in debt by private creditors last year. "It would upset investors and creditors," Schäuble wrote in the German magazine Focus. "A second haircut is not the right step for Greece … and whoever discusses it, puts everything in danger."